MARKET FOCUS VIRGINIA: Virginia: divided state - Old economy dominates in southern Virginia. New economy is taking over from public affairs and politics in the north. But on both sides, PR is making major headway. Carolyn Myles reports

Less than a decade ago, Richmond was considered one of the hottest advertising towns in the country. Agencies there handled high-profile national accounts such as Riggs Bank and Eskimo Pies. And everyone knew everyone, which made for a very congenial market.

Less than a decade ago, Richmond was considered one of the hottest advertising towns in the country. Agencies there handled high-profile national accounts such as Riggs Bank and Eskimo Pies. And everyone knew everyone, which made for a very congenial market.

Less than a decade ago, Richmond was considered one of the hottest advertising towns in the country. Agencies there handled high-profile national accounts such as Riggs Bank and Eskimo Pies. And everyone knew everyone, which made for a very congenial market.

PR was the poor stepchild, a marketing discipline only offered if ad clients requested it. That was then.

Today Richmond is a growing, respected PR town. The latest figures are from 1999 (see table), but interviews conducted by PRWeek confirm that numbers for 2000 were again strong. PR departments with parent ad agencies are attracting clients on their own, and firms such as Carter Ryley Thomas (CRT), one of the city's first stand-alone PR shops, are healthy. CRT grew nearly 20% last year and billed dollars 7.2 million in fees. It is projecting dollars 8.5 million this year.

'In the past, ad agencies looked at PR as something that was done in passing,' says Dave Clinger, who worked in the corporate financial communications department of Reynolds Metals before starting The PR Council, a loose association of solo PR practitioners. 'Today you see ad agencies that have established their own PR arm,' he says.

Take the Martin Agency (part of the Interpublic Group), for example.

In 1982 it had only one PR person. Today it has a PR group, Martin Public Relations, that comprises between 35 and 40 employees, and billed dollars 5.7 million last year. Siddall, Matus & Coughter (SM&C), and Edelman Scott are other examples of Richmond firms that made their reputations as ad agencies but have added substantial PR practices. SM&C's PR revenues totaled dollars 1.67 million in 2000 and are projected to top dollars 2 million in 2001.

It used to be hard to get 25 PR people from Virginia together at PRSA meetings. Now the Richmond chapter of the PRSA, which merged with the Richmond PR Association eight years ago, has more than 200 members, says Natalie Smith, the group's president and sole practitioner. Monthly meetings routinely draw between 80 and 100 people.

Corporate talent

A lot of credit for the birth of the PR industry in Richmond goes to corporate PR people from Fortune 500 companies, including Circuit City, CSX, Reynolds Metals, AMF Bowling, Philip Morris and The Pittston Company, that are and were based there. Mergers and downsizing during the last two decades resulted in many experienced PR practitioners starting their own practices.

Another factor contributing to growth is the lessening importance of geographic proximity between client and agency, which has allowed Richmond firms to tap into valuable client pools in other cities. Mark Raper, CEO of CRT, says his agency has experienced explosive growth in tech, with one-third of its business coming from the Washington, DC market. He reports about dollars 3 million in tech income for 2000 compared to dollars 500,000 just 3 years ago.

Martin Public Relations also has grown fat on remote clients. Its largest PR account is the US Virgin Islands, which bills dollars 1.5 million in fees, and it recently added New Jersey-based Champion Mortgage.

The third reason for growth in Richmond PR is the city's lifestyle. Unlike Northern Virginia, which reflects the Washington market and its faster pace, Richmond has a more family-oriented atmosphere. The cost of living there is lower, which agency executives say makes it attractive to clients.

Lower overhead results in lower fees, making the city more attractive than the likes of New York, Washington or Atlanta. And there are hip neighborhoods that attract graduates from local universities, such as Virginia Commonwealth.

'Richmond has attracted hot professional people who have families,' confirms Joe Slay, president of Martin Public Relations.

Not surprisingly, a handful of state government organizations have handed PR accounts over to firms in the state's capital: SM&C supports the Virginia Department of Transportation, while CRT represents the Virginia Housing Development Authority. And many of Richmond's large corporations, including Circuit City and Dominion Virginia Power, use Richmond agencies for project work.

But agencies from outside the commonwealth are dipping into Richmond accounts too. The State Corporation Commission is seeking a firm to launch a public awareness program on energy deregulation. Fourteen agencies have sent in proposals, some from outside Virginia. Others have forged partnerships with Virginia agencies.

From the top down

Northern Virginia, now thought to have one of the nation's largest concentrations of technology companies, relies largely on tech to generate PR income. SM&C, and Hill & Knowlton, which is headquartered in Washington, both have opened satellite offices recently in Northern Virginia to chase tech companies. Canadian PR firm Cossette Communications also has created a presence there - which it calls Optimum PR - alongside existing agencies O'Keeffe & Company, KSK Communications, Stackig Advertising & PR, Arnold Communications and Qorvis Communications. All specialize or have a focus in technology.

Many of the more traditional agencies operate public affairs and corporate PR practices in Northern Virginia. They include The Weber Group and its sister, Golin Harris, as well as Smith & Harroff, Creative Response Concepts and The Hawthorn Group.

But the lines are clearly drawn between tech and public affairs agencies.

The latter category clearly dominates downtown Washington and the suburbs of Arlington and Alexandria.

Martin PR's Slay says Washington, which had been the bastion of public affairs, changed with the arrival of tech companies. But now, he says the pendulum is swinging back, and Washington firms will once again rise on the public affairs tide.

In the past, large Washington agencies hunted in Virginia for smaller agencies to acquire. Now Richmond agencies have become the predators, seeking alliances and mergers.

CRT's Raper predicts his agency, as well as Martin PR, will be among the ones expanding into new markets. He also thinks new firms will be established and more players will come out of Richmond.

Hank Amann, principal of Richmond firm Amann & Associates, which recently merged with Barker Campbell Farley & Mansfield, agrees with Raper. He argues that while Richmond has already experienced an explosion of PR agencies, the quality of the work being done there will continue to spur growth. 'I'm impressed by (Joe Slay and Mark Raper). They've built two very good firms and put the market on the map,' he says.

As Richmond matures as a PR town, the once sleepy southern city will become a competitive market force, and agencies around the country could very well meet it on the playing field.